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Premera Blue Cross Seeks to Become For-Profit Corporation:
Action Threatens to Increase Healthcare Costs throughout Washington
by Phil Jordan
December 18, 2002
Premera Blue Cross, one of the largest non-profit health insurers in Washington, is asking permission to renounce their non-profit status. If the conversion is allowed, advocates believe that healthcare costs will increase and residents in less populated areas of the state are at risk of losing health insurance altogether.
Because non-profit corporations receive tax advantages from the state, Premera must receive permission from the Insurance Commissioner before converting. Commissioner Kreidler is currently reviewing Premera's proposal. The Commissioner has also hired a team of experts to examine the implications of the conversion proposal.
Healthcare advocates, including WPAS, have asked the Commissioner to allow them to become involved in the process of evaluating the conversion proposal. These healthcare advocates, who have banded together under the name of Premera Watch, are asking to be declared "intervenors" in the procedure. An intervenor has rights to question witnesses, provide expert testimony, and have access to information that is not generally available to the public.
Premera Watch is not the only group that is interested in the conversion proposal. The conversion has aroused a lot of interest across the state because there are huge sums of money at stake.
If the conversion is allowed, Premera must place 100% of its assets into a non-profit corporation. The current law in the state requires that this money be used in the public interest. However, Premera's proposal would allow it to maintain control of those assets (see the Premera Watch publication, Tangled Up in Blue: Premera Plans to Hang on to Public Assets). Premera's assets are valued at up to $2.1 billion (according to the Puget Sound Business Journal, September 20, 2002).
Because so much money is at stake, there are a lot of people who are interested in getting their hands on it. Several organizations have been acting as if they are hoping to get access to at least some of those funds. One of those groups may be the State Legislature. In other states where non-profit Blue Cross/Blue Shield corporations have converted, the state government has made attempts to take the money. With Washington State facing a $2.6 billion budget deficit, it seems likely that the Legislature will take a look at making a grab for the Premera money.
Want to read more? Check out the four publications below, all produced by Premera Watch. You will need to have Adobe Acrobat Reader software to be able to read these documents. Adobe Acrobat is available free of charge at http://www.adobe.com/products/acrobat/readstep2.html.
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Tangled Up in Blue: Premera Plans to Hang on to Public Assets |
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Tangled Up in Blue: Corporate Un-accountability in the Proposed Premera Conversion |
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